Target service costs, value engineering, activity-based costing. Lagoon is an amusement park that offers family-friendly entertainment and attractions. The park boasts more than 25 acres of fun. The admission price to enter the park, which includes access to all attractions, is $35. To earn the required rate of return on investment, Lagoon's target operating income is 35% of total revenues. Lagoon's managers have identified the major activities that drive the cost of operating the park. The activity cost pools, the cost driver for each activity, and the cost per unit of the cost driver for each pool are: Cost per Unit of Cost Driver Description of Activity Selling and verifying tickets for Number of tickets $3.35 per ticket sold entry into the park Loading, monitoring, off-loading Number of runs patrons on attraction Roaming the park and cleaning Number of litter up waste as necessary Activity Cost Driver 1. Ticket sales and verification sold 2. Operating attractions $90 per run 3. Litter patrol $20 per hour patrol hours The following information describes the existing operations: a. The average number of patrons per week is 55,000. b. The total number of runs across all attractions is 11,340 runs each week. c. It requires 1,750 hours of litter patrol hours to keep the park clean. In response to competitive pressures and to continue to attract 55,000 patrons per week, Lagoon has decid- ed to lower ticket prices to $33 per patron. To maintain the same level of profits as before, Lagoon is looking to make the following changes to reduce operating costs: a. Reduce the cost of selling and verifying tickets by $0.35 per ticket sold. b. Reduce the total number of runs across all attractions by 1,000 runs by reducing the operating hours of some of the attractions that are not very popular. c. Increase the number of refuse containers in the park at an additional cost of $250 per week. This will decrease the litter patrol hours by 20%. The cost per unit of cost driver for all other activities will remain the same.